APR Power drained by Libya contract debt (Financial Times) High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Shares in APR Energy lost nearly 7 per cent on Monday after the power rental group announced a tripling of net debt related to its high-profile contract in post-Gaddafi Libya. In a full-year trading update, the London-listed turbine hire group said that, as of December 31, it had net debt of $557m, compared with the $184m it reported at the end of 2012. APR blamed the rise on “the timing of the receipt of receivables in respect of the Libyan contracts, which were partly paid in January”, and therefore outside the accounting period. Its shares fell 6.7 per cent on Monday, to close at 920p. APR’s Libyan contract is, according to John Campion, chief executive, “the largest single contract in the history of the fast-track power industry”, serving more than 1m homes. But observers are concerned that the company is becoming over-reliant on the project, which analysts at Liberum say accounts for about 60 per cent of profits. “We believe risk remains around the group’s concentrated contract portfolio through 2014,” the analysts warned. They have a “sell” recommendation on the shares. Elsewhere in its trading update, Florida-based APR said full-year revenues came in at $310m, up 17 per cent compared with 2012. It expects adjusted earnings before interest, tax, depreciation and amortisation to be in line with expectations. However, the company warned that earnings per share would be affected by interest charges related to the increased debt, as well as a higher number of shares outstanding. The group acquired General Electric’s power-rental business in October for $314m – part of which was financed by new shares issued to the US industrial group. GE, the world’s biggest manufacturer by market capitalisation, became a near 17 per cent shareholder in APR as a result of the deal. In terms of outlook, the group said it continued to see strong demand for power in emerging markets such as Africa, Latin America and southeast Asia.
Posted on: Tue, 28 Jan 2014 11:48:50 +0000
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